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Supply

Concept of supply?- many changes (ex)

Supply: the entire relationship b/w the quantity supplied of a product and the price of that product, other things being equal. A single point on the supply curve refers to the quantity supplied @ that price.

* Quantity Supplied and Price * The price of a product and the quantity supplied are related positively, other thing being equal. That is, the higher the products own price, the more its producers will supply; and the lower the price, the less its producers will supply.

Supply Schedule

Supply Curve (same as demand but positive)

* Shifts in the Supply Curve * A change in any of he variables (other than the product’s own price) that affects the quantity supplied will shift the supply curve to a new position.

The Law of Supply

Decrease If:The price of a good falls | Increase If:The price of a good rises | * The Quantity of Goods Supplied
S1
S1
S1

S1

P2 $1.50

P1$ 1.00 P2 $1.50

P1$ 1.00 P1 $1.00

P2 $0.50 P1 $1.00

P2 $0.50

QS2
QS2
QS1
QS1
QS2
QS2
QS1
QS1
10 20 30
Qs
10 20 30
Qs
10 20 30
Qs
10 20 30
Qs

Changes in Supply Left Shift (Decrease) | Right Shift (Increase) | * The price of a factor of production used to produce increases * The price of a substitute in production rises * The price of a complement in production falls * The price of a good is expected to rise in the future * The number of firms supplying the good decreases * Weather/ Climate affects yield | * The price of a factor of production used to produce decreases * The price of a substitute in production falls * The price a complement in production rises * The price of the good is expected to fall in the future * The number of firms supplying the good increases *...

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